Startups in Indian are going through a serious economic situation that 30 per cent of them have only money left for running the business for a maximum three months. A survey by LocalCircles said that 38 percent of the start ups have already run out of cash and 30 percent have only money left for a maximum of three months. Another industrial report said that more than two thirds of startups need to secure additional capital in the next weeks to steer through the coronavirus crisis.
Despite lockdown restriction were lifted, the situation on the ground has not changed much and the startups are yet to come out of the dire situation, community based social platform LocalCircles said. They had received over 28,000 responses from the industry. The survey said that only 16 percent of startups had three to six months of cash left. It said that 12 per cent had cash for less than a month. They also noted that four start ups had already closed.
Noting that the situation was not that good, the LocalCircles pointed out that over 64 percent of the startups have slashed costs in areas such as marketing, fixed operations, human resources and deferring of tax payments.
Meanwhile, another survey by Nasscom said that 70 per cent of the start ups had less than three months of cash runway in banks. It said that 22 per cent had barely enough money to run the business to the end of the year. The survey also noted that only eight per cent of the start ups said that they had enough money to run for the next nine months. In the survey, 90 per cent of the startups said that they were facing revenue loss. About 30 m to 40 per cent of the startups told the survey about closing down their business in the coming days.
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